SES and Eutelsat strike historic agreement

By Chris Forrester

January 30, 2014

The long-festering argument between satellite operators SES and arch-rival Eutelsat has been resolved. The dispute centres over access to 500 MHz of frequencies at the 28.5 degrees East orbital position. A Eutelsat craft was occupying the position. Back on September 16th last year, following the decision of a French Chamber of Commerce arbitration, SES announced that it had won the dispute and would start transmission on October 4th on its own satellite, which it duly did. Eutelsat’s clients switched to the SES satellite.

Eutelsat contested the decision, saying it would also appeal an earlier August 30th verdict achieved by SES at a Bonn, Germany court.

The announcement from both parties clears away those complaints, and reinstates a working relationship between the two giant satellite operators. In essence, the dispute is completely settled, and fresh commercial terms agreed. Eutelsat can lease certain transponders from SES at wholesale rates, which it can then sell on to third parties.

“SES [is] continuing to operate its satellites at 28.5, and Eutelsat independently commercialising part of the capacity of the previously disputed frequencies,” says the joint statement. “Eutelsat will commercialise over Europe on the SES fleet 125 MHz (eight transponders) of the formerly disputed 500 MHz. Eutelsat will also commercialise on the SES fleet the 250 MHz (12 transponders) which was not the subject of the legal proceedings. The 20 transponders will be operated on three new satellites which SES is deploying at the 28.2/28.5 degrees East neighbourhood – Astra 2F, Astra 2E and Astra 2G.” Also as part of the complete deal, both SES and Eutelsat have agreed to co-ordinate most of their frequencies in the orbital arc that stretches over most of Europe (from 1 degree East to 52.5 degree East) and thus maximise revenues from existing and new markets that fall under their separate satellites.

The agreement also gets close to the old established status quo which has existed between the two parties since 1999 (the Intersystem Co-ordination Agreement).
For SES, it can now proceed with fully utilising and planning for its Astra 2E, 2F and 2G satellites. While 2E and 2F are already in orbit, 2G is not scheduled for launch until later this Spring (Q2).

“The agreements with Eutelsat create a secure framework for operations in major broadcasting and data markets in Europe, Middle East and Africa,” said Romain Bausch, President/CEO of SES. “They are beneficial for our whole industry and, above all, for our customers and end users as they experience optimal satellite services. The agreements allow SES to fully leverage its satellite and fleet investments and operate its assets and frequency spectrum efficiently. We can focus on further commercialising our satellite capacity and ensuring excellent services for customers and users worldwide.”

Michel de Rosen, Chairman and CEO of Eutelsat, said: “Guided by key objectives to deliver clients impeccable service and to optimise spectrum use, Eutelsat and SES have taken a pragmatic and business-like approach to reaching this settlement. These long-term agreements clarify the conditions for interference-free operations, enabling each company to independently expand its commercial activity in a competitive environment. Eutelsat is committed to delivering innovative services at one of the most vibrant neighbourhoods in the broadcasting market and can now further improve the productivity of its in-orbit resources and future investments.”

Eutelsat estimates the impact on revenues for its fiscal year 2013-2014 at approximately -€5 million. There will be no impact on revenues in the two following years.